Warehouse looks to sell, lease back property

Warehouse Group is looking to raise revenue by selling property on a sale and leaseback basis. Photo / NZH

Discount retailer Warehouse Group said it plans to sell three stores and its Wiri distribution centre on a sale and leaseback basis for about $100 million through Colliers International.

It expects the sales process will be completed during the next six months and the long-term leases offered "reflects the importance of these properties to the Warehouse's ability to grow revenue and satisfy our customers for many years into the future".

"The Warehouse regularly reviews its property holdings to determine whether to own or lease a particular property and the most recent review has resulted in the marketing of these properties," said chief executive Mark Powell, in a statement.

"The sale proceeds will be reinvested in the business in line with the priorities identified in the company's strategic plan," Powell said.

The properties will provide attractive opportunities for investors to acquire quality commercial assets in prime locations occupied by a leading New Zealand company, he said.

At the November annual shareholders' meeting, Powell said the company would sell between $75 million and $100 million of "non-strategic assets" over the next five years.

Warehouse shares are down 1 cent at $2.51. The shares are off their $2.48 February low but have been trending lower since hitting $4.55 in October 2009.